Feature Articles
How did the Global Recession Alter Singapore's Export Profile?
20 May 2010
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World merchandise exports contracted by 23 per cent in 2009 - the sharpest decline since World War II. Singapore’s merchandise trade dropped by an even greater magnitude of 27 per cent in the first half of 2009 compared to the same period in 2008. Singapore’s domestic exports were particularly hard-hit, falling by 29 per cent. While global trade flows have recovered from the lows of the first half of 2009, it is useful to consider if the shock brought about by the global recession altered Singapore’s export profile significantly.
To understand how trade patterns evolved with the crisis, we take a detailed look at Singapore’s domestic exports. Specifically, we examine the changes in the top 10 categories of domestic exports, as well as Singapore’s top 10 trading partners, between the second half of 2007 and the second half of2009. Exhibit 1 lists the top 10 types of domestic exports at a broad level (viz., at the 2-digit level of the Harmonised System codes).
Structural changes within the electronics sector?
The top domestic export category of electronics saw the steepest decline between 2007 and 2009, with the category of “Electrical machinery, sound recorders etc.” falling by 13 per cent. "Postponable goods" such as electronics components have very long supply chains. A drop in final demand sends shockwaves through the entire supply chain, resulting in a sharper decline in the demand for the components than what would be expected by considering the drop in final demand.